How to play the Indian Market

The Indian Congress Party has been the party of India for decades. After the BJP-lead coalition lost to it in 2004, Congress has led the country with as much fanfare as stepping out of a bathroom stall. It finds popular support for its mandate dwindling much more than commentators in either India, the Indian diaspora, or the international critics, would have you think.

The 2014 elections should therefore be something to keep your eyes -- even if many believe that Mr. Modi, the leader of main opposition party the BJP, does not stand a chance of winning.

I'd argue that the important base of the Congress Party, half of the country's lower-class Hindus, most of the urban middle-class Muslims most middle-class Hindus, and the business classes, are becoming more disaffected than ever. Reasons vary. They include appointing ineffectual figureheads in charge as party chairman like Rahul Gandi. Such a move was a faux pax in a time of mass media where his audible mistakes and soundbites become internet memes and even catch-phrases for Bollywood songs, and as voters grow more concerned than ever that's more a liability than an asset for the man who's only claim to fame is his last name resembles Sonia Ghandi's. Other mistakes include keeping on the sidelines effective and popular governors like Jayalalitha from Tamil Nadu, the lack of progress in areas like Foreign Direct Investment (FDI) that continues to be the bane of the business community, or pushing "women's empowerment" despite a legal system of British Common Law that has not been reformed since the late 19th century.

You will find future Indian leader who will, like Warren G. Harding did with Cox in 1920, will push a vision of economic progress that many can grab onto. Many of these people who vote for this leader will probably regret doing it in a year or so after the election, but because the vision is so substantial economic and could come after a period of economic recession (that will come to India either very soon or right before the election for a variety of reasons), such a series of these events could spur Mr. Modi to an unprecedented electoral victory should he run a modern campaign (using such things as social-media and a lot of very smart Indian advisors who could shy more extreme parts of the BJP away from making statements) and use of a large, cross-religious campaign platform.

Add this to a number of changes, Dr. Duvvuri Subbarao will lose his job in 2013 (who will probably be replaced by the most senior international economist, Raghuram Rajan of the IMF), inflation is rampant in India as local gold-prices soar and will do so at alarming rates, and corruption remains an issue that both parties will receive the fair share of scandals for.

In general, to predict that Mr. Modi, or whoever could run such a campaign for the BJP, could win would inspire the confidence of investors internationally. In any event, Indian stocks like ICCI or Rediff might be good long-term buys. Even its bonds, U.S. denominated ones, might be as the Indian recession hits. The long-term prospects of a Modi win mean that while he may not be feted by the critics, he will be widely liked as an alternative to the Congress Party by the business community.

 

It's really funny when people compare China and India and say stuff like "oh yea they are competitors, each with good GDP growth."

Please - I've been to both countries. India is nowhere as developed as China. Beijing/Shanghai/Shenzhen/Guanzhou are exponentially better (cleaner, better roads, tech-wise...etc) than New Delhi/Mumbai/Bangalore. At least I can walk on Shanghai streets without stepping on goat shit. The problem with India is too many people in too little space. China's land mass is much bigger than India's and there's much more room for expansion. More expansion = more construction = more business/investment opportunities.

 
Best Response
Beretta:
It's really funny when people compare China and India and say stuff like "oh yea they are competitors, each with good GDP growth."

Please - I've been to both countries. India is nowhere as developed as China. Beijing/Shanghai/Shenzhen/Guanzhou are exponentially better (cleaner, better roads, tech-wise...etc) than New Delhi/Mumbai/Bangalore. At least I can walk on Shanghai streets without stepping on goat shit. The problem with India is too many people in too little space. China's land mass is much bigger than India's and there's much more room for expansion. More expansion = more construction = more business/investment opportunities.

wow, really? you think India's relatively low GDP growth is a space issue? FYI: Hong Kong, Singapore, South Korea, and Taiwan all have population densities greater than India's.

http://en.wikipedia.org/wiki/List_of_sovereign_states_and_dependent_ter…

Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?
 

Very interesting and sharp observation! I learnt something from this one...I am sure india is narcissist in a certain way, but I guess it has both its pros and cons? I hope you can elaborate more on emerging countries in the next articles.

 

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anamerican

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